An institutional model for rural services

In areas where no transmission lines are expected, the organization of affordable and reliable domestic electricity is a major challenge. To address this, an institutional model has been piloted in Lao PDR. The model may be relevant to the water sector, since there is scope for integration of water and electricity services in rural areas. A key feature of the model is that it establishes an incentives framework which attracts private-sector participation in reaching large numbers of villages, while also rewarding long-term reliable delivery of service. The financing mechanism motivates villagers to take care of equipment. On the national level, the model includes facility for self-finance, and so continuously delivers reliable service independently of project funding cycles.